A Full Court of the Federal Court comprising Goldberg, Jacobson and Tracey JJ has overturned a decision of a single Federal Court Judge on the question of the appropriate penalties to be imposed upon a union and a number of its officers in relation to coercive conduct done contrary to the Building and Construction Industry Improvement Act 2005 and the Workplace Relations Act1996.

The purpose of the contravened sections of the two Acts, was to prevent coercive conduct intended to prejudice employees and employers who elected to have their relationship regulated by industrial instruments of their choosing. The union sought to prevent employees engaged under Australian Workplace Agreements (AWAs) from working on a site on which some of its members were employed. It was not prepared to encounter such a possibility and was prepared to, and did, resort to unlawful coercive conduct to prevent it (at [90]).

The unions and three of its officers who were charged with breaches of ss 43 and 45 of the Building and Construction Industry Improvement Act and s 298P(3)(a) of the Workplace Relations Act, pleaded guilty, and the determination for the primary Judge was the assessment of penalty. The Full Court found that the discretion of the Trial Judge miscarried in a number of regards so as to satisfy the well known test stated in House v The King (1936) 55 CLR 499. The union and its organisers had successfully attempted to have a construction company no longer to use the services of a sub-contractor who had employed its workers under an AWA. The construction company had earlier pleaded guilty and had been fined in relation to its role in terminating its relationship with the sub-contractor.

This case provides an excellent explanation as to the factors relevant in considering penalties to be imposed upon coercive industrial action contrary to the relevant industrial legislation. The trial judge had erred in assessing the penalties in relation to what was thought to be one unlawful act, whereas the Full Court found that many unlawful acts had to be considered in relation to the entire course of conduct. Secondly, the trial judge had failed to have regard to the full history of previous contraventions by the union in relation to similar legislative provisions. The trial judge had erred in relation to contrition, and in fact the Full Court found that the union had expressed no contrition for its conduct (at [94]). The trial judge had assessed the seriousness of the offence by the union as less serious than the behaviour of the construction company. In that regard, the Full Court seriously diverged in its opinion from that of the trial judge. It did not accept that the construction company’s conduct was as serious as the union’s, much less that it was more serious. The Full Court found that the construction company’s behaviour would not have occurred, had not the union been the moving party and had not its conduct negated the choice of the construction company (at [77]).

Also rejected was a submission that the officials were merely pursuing and conducting themselves in accordance with the union policy. In that regard, the following was said (at [85]):

“A union is free to adopt any policy which its elected officials and members considered to be appropriate from time to time. The union is also free to pursue and implement such policies by lawful means. What is not permissible is the pursuit of policy objectives by means which are unlawful. If officials or members of a union act unlawfully it cannot be asserted in mitigation, that the persons concerned were seeking to achieve ends, which the Union wished to pursue. The end does not justify the means.”

In increasing the fine against the union, the Court had regard to the principle of parity in relation to the sentence imposed upon the construction company. In allowing the appeal in part, the Full Court increased the fine against the union from $18,000 to $50,000. In relation to the individual respondents, the trial judge’s orders were set aside and significantly increased penalties were imposed upon each of the officials.

In conclusion, the Full Court stated that it agreed with the judge’s conclusions in relation to specific and general deterrence, being significant considerations when fixing penalties for contraventions of such statutory provisions. The Full Court stated, “Penalties will serve as deterrent only if they are fixed at a meaningful level” (at [89]). When one considers the size of these penalties, it is little wonder that there are a number of unions seeking to have the Building and Construction Industry Improvement Act 2005 rescinded and the powers of the Inspectors of the Australian Building and Construction Commission removed.

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